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Trade Maid

Susan Carroll Schwab seems to have slipped under the radar in her ascent to the position of US trade representative (USTR). Until she was confirmed by the US Senate earlier this month, few outside the Washington circuit would have recognised the 51-year-old trade veteran. And yet everything about her career and character in trade policy suggests that Schwab has been leading up to this all her life.

From her first job at the USTR in the 1970s, through her time as a Congressional trade aide in the 1980s, to managing foreign service officials in the 1990s and helping run Motorola, Schwab has paid her dues. “She earned the ambassador’s title by dint of intelligence and hard work, without family connections or political patrons,” says Gary Hufbauer, a trade expert at the Institute for International Economics, a Washington think-tank. “Sue is tough and smart. On the day of her Senate confirmation, she brought more expert knowledge of trade issues to the USTR office than any predecessor.”

Schwab will need all these skills, plus a pot of luck, to overcome the poor hand she has been dealt. There is scant time to build a reservoir of trust in the US Congress or with foreign trade ministers as they race to meet their latest deadline to salvage the failing (or ailing) Doha Round of the World Trade Organization.

Nor is there much enthusiasm for the Round from big firms in the US – or, indeed, in much of Europe. Add to that entrenched opposition to serious liberalisation in Brazil, Russia, India, China and other emerging markets – and a White House on the political ropes – and it amounts to an almighty challenge for the new hand on the trade tiller.

Schwab becomes the third US trade representative in a little more than five years, following Robert Zoellick (2001-05) and Rob Portman (2005-06) who was in the job for just 11 months before being named director of Office of Management and Budget at the White House.

She arrives at a critical time. WTO Director-General Pascal Lamy has set

30 June as a deadline to agree basic formulas for cutting farm subsidies and reducing agricultural and manufacturing tariffs. But if a deal is not struck soon, Congress is unlikely to approve it before President George W. Bush’s fast-track trade negotiating authority lapses in mid-2007. “This is a once-in-a-generation opportunity to generate global economic growth and to lift millions out of poverty and it will continue to be a top priority for this administration,” Schwab said in April, when she was nominated as USTR.

Schwab faces other challenges too. Moving the genial and popular Portman – who had built effective alliances in Congress and among the WTO’s 149 members – at such a time has been interpreted as a sign that the Bush administration has lost hope in successfully concluding the Doha Round.

The main cause for the American gloom appears to be the EU’s reluctance to open its market to more farm imports. Schwab is expected to crank up the pressure on European capitals, enlisting the support of nations such as China, Brazil and India, as well as European business groups and sympathetic EU member states. Schwab has also signalled she will be relentless on issues like European government aid to Airbus.

Schwab’s defenders say that her policy experience – she was also Portman’s deputy for five months before her promotion – puts her in excellent stead to take the baton in the final leg of these delicate negotiations.

Schwab describes herself as a pragmatist and is unconcerned about the challenge. “I like to get things done. I am a problem solver,” she said during her confirmation hearing. But she has also recognised rising public anxiety over trade and the erosion of bipartisan Congressional support for open markets.

And her emphasis on enforcing trade pacts reflects concerns about the US trade deficit, which hit a record $717 billion (€571m) in 2005 and is on track to surpass that this year. That unease emerged even in Schwab’s confirmation hearing: the vote was delayed by New York Democrat Senator Charles Schumer, who expressed concerns about China’s commitments to open its markets – eventually dropped after Schwab threatened to file a WTO case against Beijing over financial services.

A true-blue trade technocrat, when Schwab first walked into the USTR’s office 29 years ago, she already had a Ph.D. in public administration and international business from George Washington University, a Master’s degree in development policy from Stanford University and a Bachelor’s in political economy from Williams College, Massachusetts. She joined the USTR team as an agricultural trade negotiator, before serving as a trade policy officer in the US embassy in Tokyo.

Schwab spent most of the 1980s as an aide for Missouri Republican senator John C. Danforth – chair of a Senate subcommittee on trade – helping him write a landmark 1988 trade law.

She served under then president George H.W. Bush and was credited with revitalising the 1,000-member US and Foreign Commercial Service, which supplies trade specialists in US embassies around the world.

That was followed by a spell at Motorola, before becoming dean of the University of Maryland’s school of public policy. In 2003, she was nominated to be the first female deputy treasury secretary, but she withdrew, saying that “compelling personal reasons led me to conclude that it will not be possible for me to serve at this time”. Her office refuses to answer questions on this issue.

But she was able to take up the position of USTR. Revealingly, at her confirmation hearing last month, Schwab – who, as part of a foreign service family, grew up in Africa, Europe and AsiaÊ- introduced her parents and her sister to the assembled senators.

But, although she proudly hailed her family as her “most important source of support”, Schwab also appears naturally suited to the position of USTR.

“Susan is a negotiator’s negotiator – she never loses sight of her objective,” says Franklin Vargo, vice-president at the National Association of Manufacturers, who has known Schwab for two decades. “She has a winning way with her personality that makes people want to open up to her and work with her. Some of her favourite words to her staff are: ‘Why not?'”